Jack Bogle knew John Maynard Keynes. At least, it’s theoretically possible that the 87-year-old Vanguard Group founder and index-fund pusher knew John Maynard Keynes. Maybe John Maynard Keynes was a friend of Jack Bogle. And President Trump? Well, he might be John Maynard Keynes, sayeth Bogle.
”He is a Keynesian who wants to build the economy … to spend a lot of money, have the government undertake a lot of spending and borrowing in the public marketplace to add to aggregate demand for our goods and services here in the U.S.,” Bogle said of Trump in a wide-ranging interview set to air in three parts, beginning Tuesday, on “MoneyLife with Chuck Jaffe.”
That program doesn’t sound like the kind of thing that a lifelong Republican like Bogle would go in for, but he’s 87, and it’ll be good for stocks in the short-term, which is all most 87-year-olds worry about. But Jack Bogle has spent most of his 87 years worrying about the long run, and on that, well, he’s not so sure.
“I am absolutely persuaded that the following things are bad for the stock market in the long run,” Bogle notes. “I’m thinking here of the gap between the wealthy and the poverty-stricken increasing as we go, and going to get worse. I’m thinking about racial divisions in the country, and I think they’re not going to get any better under the new administration and could even get worse.
Says Bogle: “I’m thinking about global trade to the extent global trade is threatened by the president-elect’s program. That’s not good. … To the extent we back away a little bit from Europe and NATO — which he has talked about doing — the bulwark against communism in Europe. Each one of these things — the wealth gap, the racial gap, the threat to global trade, the failure or apparent failure to give NATO the kind of support we have given them in the past — is, in the long run, bad for our society, bad for our economy, and bad for our stock market.”